Create a one-paragraph summary of each.
When law firms talk about going green, they may be doing more than simply recycling scratch paper.
A growing number of firms are launching so-called greentech or cleantech practice groups. These groups combine the expertise of energy, project finance, tax, land use and environmental lawyers to guide clients through the morass of government regulations, guidelines and incentives aimed at climate change and sustainable development. They're also helping clients in the development of renewable energy sources and other related technologies. And with a market segment valued at more than $70 billion a year, business is blooming.
The practice area sprouted when a number of client interests coalesced, says Los Angeles lawyer Edwin Feo, a partner at Milbank, Tweed, Hadley & McCloy. "If you went back 10 years, there was a clear difference between those in the cleantech side-which consisted of venture capital and new technologies-and the renewable energy or greentech side. Today, those two groups have blended together."
But it's not just the big firms that are getting a bite at the apple. In Albany, N.Y., for example, the 70-lawyer firm Whiteman Osterman & Hanna launched a practice last year because of the unique role it could fill in upstate New York for its clients. For example, financing a wind farm can require involvement from both Wall Street and big firms, explains partner Terresa Bakner. "But a lot of this is local. Big Wall Street firms are not comfortable in local towns of 3,500 people, where half of the population is related. A lot of local and regional work has to occur, and that is what is driving so many firms into this space."
So, too, is politics. The 40-lawyer Denver firm Fairfield & Woods found itself following clients into the practice after mandates from state and local government officials that have put climate change and other eco-friendly practices on the front burner, says firm partner John Eckstein.
"Our governor told us to get going on it," he says. "If we didn't do it, we were going to lose [client] relationships."
-Jill Schachner Chanen
"Green building" is no longer an abstract concept foisted by environmental activists on an unwilling market sector, but a market driven reality re-enforced by governmental efforts. This article addresses such efforts by the Connecticut General Assembly: (1) Connecticut Public Act 07-242, which mandated changes to the Connecticut State Building Code to require buildings costing $5 million or more built after Jan. 1, 2009 and renovations costing $2 million or more starting Jan. 1,2010 to meet the Leadership in energy and Environmental Design (LEED) "Silver" standard or its equivalent; (2) Raised Bill No. 5600 in the current legislative session of the General Assembly, which will repeal the mandated changes to the Connecticut State Building Code required in PA 07-242; and (3) Raised Bill No. 5798, also pending in the current legislative session. Which will provide tax credits for Green Buildings. Factors such as tenant demand, corporate accountability, socially conscious investment vehicles and financial pressure from traditional capital providers (both equity and debt) have resulted in a "greening" trend that will redefine class A office space. Already in New York City, the market does not recognize a new building as class A space unless it meets a "green standard." In major urban markets like New York City and Boston, almost all new major construction is at least partly green and much of it achieves the highest of currently recognized standards. Market pressures should continue to motivate developers to build green in other urban areas as well. These "green" accomplishments have been achieved primarily by voluntary action, rather than by government mandate. Heavy-handed governmental efforts to compel construction and renovation to meet regulatory standards, such as Public Act 07-242, risk the unintended consequence of discouraging green development. Added as a last minute insertion without the benefit of public participation. Section 78 of Public Act 07-242 was buried deep within a 100-plus-page energy bill. The required building code amendments will apply to private and public sector projects, other than residential buildings with up to four units. Although these requirements may be waived if the Institute for Sustainable Energy finds that the cost of compliance significantly outweighs the benefits, these state building code amendments may result in increased cost and delays as well as potential litigation and the disincentive to build in Connecticut. Unless Public Act 07-242 is repealed, many important issues must be resolved. For example, the act and code amendments do not define what constitutes renovation for the purpose of imposing the LEED standard, nor do they provide guidance on calculating threshold amounts. Thus, do these amounts include expenses for environmental remediation or the cost of installing energy-efficient materials? Uncertainty also resultsfrom an absence of guidance on whatconstitutes equivalency to the LEED silver standard. For example, will the newrequirements differentiate among office,warehouse, industrial and multifamilyproperties, all of which require differingconstruction techniques?Other crucial questions abound:What will happen if LEED certification oran equivalency determination is delayedor denied? Will this delay or denial resultin the refusal to grant a Certificate of Occupancyor a penalty? What standardswill the Institute for Sustainable Energyuse to determine whether the cost ofcompliance significantly outweighs thebenefits? What procedure will the instituteuse to assure due process to the partieswhose livelihoods will be affected bythose determinations?Imprudent answers to these questionscould result in unjustifiable, potentiallyunconstitutional deprivationsof property and ensuing litigation. A"wrong" answer could also inhibit bothnew construction and much-neededrenovation, with a particularly harsh effecton the redevelopment of Brownfield properties that already suffer from theneed to clean up historical contamination.More sensible solutions have recentlybeen proposed in the General Assembly:Raised Bill 5600 would repeal the mandatorybuilding code changes of PublicAct 07-232 (although other provisionsin the bill, not pertaining to the LEEDstandard, have engendered reasonableand understandable opposition from thebusiness community) and Raised Bill5798 Would establish a tax credit for realestate projects that meet or exceed LEEDsilver certification.The commercial real estate communityshould remain vigilant about theselegislative and regulatory developments while continuing to recognize that greendevelopment makes sense for everyone- communities, government, owners,developers, investors, tenants, as well asfor the climate and the environment.Barry J. Trilling of Wiggin andDana L.L.P. in Stamford, Conn., isthe office climate change and sustainabledevelopment inter-disciplinarypractice group leader